There are times when individuals and small businesses avoid bankruptcy like it was the plague. They often go to extraordinary lengths to avoid bankruptcy, including taking on more debt in order to clear old debt. This is a cycle that can often only be broken by an enforced bankruptcy petition – known legally as an [...]
While bankruptcy has been designed to help those in serious debt find relief, in the hands of a smart attorney, it can also be used as a leverage tool. For home owners, the classic example is having secondary mortgages wiped in situations where the house’s current value is less than the primary mortgage. This leaves [...]
While bankruptcy for businesses is often thought of as a death knell for that business, it can often be the first step to that business’s survival. A Chapter 7 bankruptcy for business will result in the business’s closure and the sale of all assets. However, a Chapter 11 or Chapter 13 bankruptcy petition allows a [...]
If you own a business and that business starts to have financial difficulties, you have the choice between a Chapter 7 or Chapter 11 petition for bankruptcy. Under the Chapter 11 petition, the business is allowed to continue trading while a reorganization plan is put in place. This plan has to be approved by the [...]
In simple terms, there are two types of bankruptcy that affect most people – a liquidation bankruptcy (or Chapter 7 bankruptcy) and a reorganization bankruptcy (or Chapter 11 and Chapter 13 Bankruptcy). The terms really are more appropriate to business bankruptcy, however, the terminology is also used for personal bankruptcy. In a way, the names [...]
There are times in business when you know that liquidation (Chapter 7 Bankruptcy) is the only way out. However, there are other situations where a reconstruction (Chapter 11 Bankruptcy) may be an option but in reality the business is better off folding. This is certainly true in small one person businesses where the business centers [...]
Most people relate bankruptcy to either business going bust or to poor people who cannot afford to pay their bills. Those same people question the need for the wealthy to file for bankruptcy – after all, they are wealthy, right? If you were to take a simplistic view, then yes, they may be wealthy or [...]
If you own a business and you are considering filing a bankruptcy petition, you have two choices – a Chapter 7 petition, also known as a liquidation bankruptcy, or a Chapter 11 petition, also known as a reorganization bankruptcy. There is a legal term known as a ‘legal entity’ and this can have a huge [...]
There are two terms that are often used when it comes to individuals or businesses not being able to pay their debts – insolvency and bankruptcy. Are they the same thing? Technically speaking, they are not the same even though general language interchanges the two. Insolvency is a situation, generally used in business, that describes [...]
Chapter 11 bankruptcy is most often used for businesses, but individuals may apply for it as well. In either case, it important that you know what you are getting into before you file for bankruptcy. Here are 5 things you should know before you file for a Chapter 11. Under a Chapter 11 bankruptcy, unless [...]
Filing for bankruptcy as a business can be a costly process. It is not uncommon for a Chapter 11 bankruptcy petition to reach costs of $50,000 or more – the filing fee is almost $1,000 on its own. You can, however, reduce these costs if you avoid some of the biggest mistakes made by businesses, [...]
In most cases, debtors petition the court as a means of obtaining relief from burdening debts. In rare cases, creditors can force an individual into bankruptcy. This will most often occur when the debtor has been operating a small business as an unincorporated sole trader. Involuntary bankruptcy can also occur to corporate entities, when creditors [...]
The most common form of bankruptcy for any business is what is known as a Chapter 11 petition. Under this Chapter, a business is allowed to continue trading while it tries to restructure itself to become more profitable. Like other forms of bankruptcy, the Chapter 11 petition provides benefits that prevent creditors from taking any [...]
Generally speaking, the process of placing a business into bankruptcy is fairly straightforward. If your business has been incorporated, then you can seek debt relief for your business under a Chapter 7 bankruptcy petition, or you can try and restructure your business by filing for protection under Chapter 11. For sole traders, you are treated [...]
Taking a business through the bankruptcy process is a serious business. In some cases, what effects one business may snowball and drive many others to similar situations. Chapter 11 bankruptcies are designed along the same lines as Chapter 13; the business pays what it can on its unsecured debts, often over three to five years [...]
The majority of bankruptcy petitions presented to courts are those made my debtors seeking relief. A small proportion of bankruptcies are those forced onto debtors by creditors – these are referred to as involuntary. The process is more complicated than a debtor-instigated petition. The creditor petitions the court for a either a Chapter 7 or [...]
While a lot of attention in being placed on individuals and their financial problems, small businesses are also struggling. When a small business reaches a stage where mounting debt is making the business unviable, filing a petition for bankruptcy may appear as the only solution. For many businesses, the problem is in deciding which Chapter [...]
Running a business can be a rewarding career for many people – for many others, it can be nothing but a nightmare with bankruptcy their only escape. With over 70% of new businesses failing within the first two years, the chances of success for most new businesses is limited from day one. If you’re in [...]
The bankruptcy process for businesses in general is through a Chapter 11 filing. We covered this topic in an early post, Bankruptcy Provisions For Business, where we looked at how the Chapter 11 process worked for all businesses. Small businesses can be dealt with in slightly different ways. Bankruptcy is a serious issue so for [...]
One of the most common forms of bankruptcy that people will hear about is a Chapter 11 petition for bankruptcy. You will often hear news items where a certain business has applied for a voluntary Chapter 11 petition for bankruptcy. You will also hear about involuntary petitions for bankruptcy. Chapter 11 is used for businesses [...]
Primary producers such as family farmers and family fishermen that are financially stressed are able to apply for bankruptcy under a special provision known as a Chapter 12 bankruptcy application. The Chapter 12 bankruptcy application is treated in a similar way to a Chapter 13 in that the debtor can suggest an scheme of payments [...]
